Longtime readers know I'm a big sports fan, particularly a huge baseball fan.

I don't know what made me fall in love with baseball. My mother was from South America, and my father never played sports (nor took me to any), but it always appealed to me.

It could be my summers spent at home by myself watching the Chicago Cubs on WGN or the Atlanta Braves on TBS while my mother was working. Maybe it was the fundamentally "American" nature of the sport. (It is called "America's Pastime," after all.)

Or it could be the incredible strategy underlying the sport that would be barely evident to someone who didn't know what was happening in a game.

For whatever reason, I became a huge fan and have attended close to 800 games in six different countries. I plan to add my 7th country to the list by seeing my New York Yankees play in Mexico in about a month!

While I never played baseball past the sixth grade, I became an avid student of the game. I found some of the sport's simple strategies appealing. Not just for the game of baseball but also for the game of life – and investing...

With the baseball season kicking off last week with the reporting of "pitchers and catchers," we thought we would share a note we wrote a few years ago.

Here are three principles of baseball that apply directly to the stock market...

1. Hit the ball where it's pitched.

This is one of the investing sayings I have repeated the most in my career.

I speak often about "selectivity" in making your trades or investments.

To outperform the markets, you need to find the best opportunities available. If you were playing the averages, you could buy an index fund and be done with it.

Of course, it is possible to outperform the markets, and the key is being selective.

Along with selectivity, you have to take what the market is giving you, not what you want it to be giving you.

Last year was a great example. While it was a terrible year for long-term investors, it was a great year for trading.

To a certain extent, the strategy we use in HX Trader is precisely what they talk about in baseball. We only look to take what the markets give us.

There are always good pitches in the market; you just need to figure out when (and how) to swing the bat.

2. Trends persist.

This one comes from Tony La Russa, one of the most excellent baseball managers of all time.

La Russa believed that trends – or hot and cold streaks – constantly emerge in baseball. The best bet is to follow them until they demonstrate they are not working. Sure, they can be painful when they stop working, but streaks can go on for a long time.

You can make a lot of money if you are disciplined in identifying the streaks and following them until they change. I had never given much thought about that as it relates to baseball, but I think about it a lot in investing.

One of my main rules in HX Trader is looking for trends, not only in stocks but also in a company's operational performance.

For our core RSI-based trading strategy, I look for stocks that have been long-term winners but also management teams that are beating Wall Street's expectations and have a history of growing their businesses.

The key in the markets is identifying the trends and figuring out how to capitalize on them appropriately.

3. Focus on the approach, not the outcome.

Or, as I like to say, "Plan the trade, trade the plan."

Outcomes – in baseball and investing – are uncertain. My job is to develop a plan and methodology to help me determine where to find the best opportunities.

But even those can fail. If you have a good plan on how to deal with the outcomes – positive or negative – you will ultimately win out with a winning strategy.

Like in baseball, even if you "fail" half the time in the markets, you can still win!